You should be able to substitute a worsted weight yarn, it would have a '4' on the label to indicate medium weight. Vanna's Choice, Caron Simply soft, or Red heart Soft would be good ones that are similar. Or Lion Woolease or Cottonease.

Those label numbers, in this case "4", cover a bit of a range. The recommended general gauge for this yarn is 17 sts X 25 rows = a 4" square. To get the same "drape", make sure that the yarn you choose has as close as possible to those gauge numbers on its label.

I made that blanket about 20 years ago for my daughter and it's an easy, easy pattern to do. You could try Red Heart's Baby Cloud yarn, which worked really well for the last blanket I made for a friend's daughter.

Here is a link to Red Heart's collection of yarns. You may find what you want/need in their wide selection of baby yarns.